My understanding that the total return of a fund is the NAV capital return plus the income return (dividends, etc). It seems to me that (outside of tax implications) total return is the most critical number for comparing funds. However, most of the standard financial charts (Google, Yahoo...) only seem to allow me to compare the NAV of the fund - this only really seems useful when a stock or fund does not produce dividends. I found this confusing when I first got into investing - I was often comparing apples to oranges.

It's true, I can go to the individual fund page - e.g. VBTLX or Morningstar performance pages to get the total return but this is not the what a search engine or many financial sites will give me if I put in the symbols.

  • Is my understanding correct about wanting to compare the total return of the fund correct?
  • If so, why is the NAV capital return not the default reported in so many places?
  • As an investor why do I care about the NAV? Why wouldn't I be more interested in the Total Return?
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    It's not a problem just for comparison. My broker does the same thing by listing my holdings with a "Unrealized gain/loss" column, which is appropriate for stocks, but I have to click through or use a special view to get the Cumulative Investment Return for funds.
    – user71659
    Feb 17, 2018 at 19:52

1 Answer 1


Actually, the dividend payout (if it is a dividend generating fund) is adjusted towards the NAV. So NAV is the thing to consider. It works very similar to stocks; for example if a stock declares dividend, say of 2, the the stock price generally reduces by the same amount ex-date (considering of course, no other factor). The reasoning is that the value of a stock reflects the value of the company for that portion of the company; if a company declares dividend, the cash/reserves are depleted per stock by that much, investors get that and the actual value of the share reduces by that amount. In NAV case also, post dividend, the NAV drops by that much reflecting, which in general is useful to compare funds.

However, you are correct that for comparing stocks/funds, the current NAV/price growth alone may not fully give you the full picture. In this case you probably have to compare within a category. You will certainly get discrepancies if you compare a dividend oriented MF with a growth oriented MF.

  • Thanks - I get that the NAV represents the value of the stock for a company (hence the name Net Asset Value). However, it seems nearly useless in determining dividend returning stocks/funds, or bond funds. Even within the same category (for instance bond funds) the NAV tells me very little. To put it more simply - as an investor why do I care about the NAV? Why wouldn't I be more interested in the Total Return?
    – Egret
    Feb 17, 2018 at 18:00
  • I agree that NAV is more important for growth oriented MFs. For dividend oriented MFs also it is useful; you actually need the NAV to calculate the fund yield. For example, in one year yield=((NAVend-NAVstart)+DIV1yr)/NAVstart. You could then compare them, say to a corporate bond and do a comparative analysis. So, while dividend returned in a time period is important, so is NAV.
    – Ironluca
    Feb 19, 2018 at 6:29

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